Using Business Goals to Help Determine Website Budgets

October 10th, 2017

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Heads up! This is a long post about budgets, with the goal of providing more transparency in the website design field.

When it comes to website budgets, I tell many prospective clients that their budget should be based off of the following question:

What short-term and long-term business goals are you trying to meet and how important is your website in helping to achieve these goals?

It’s not a groundbreaking approach, but another way of looking at it is this: if your website is going to impact your bottom line a lot, don’t be afraid to invest in it. On the other hand, don’t invest a lot into something that won’t bring you a return that makes sense.

After you’ve thought about how important your website is to your business’s success, now it’s time to get concrete numbers going. Which, unfortunately, is not an easy thing to do.

So after all of that, here’s my goal with this post: to shine a little more clarity on how to arrive at a budget that will enable you to launch a successful website which meets your goals and objectives.

Budgets. Vary. Wildly.

Often, potential clients are very eager to get a “price” for a website. The best analogy I have for this situation is buying a car. Imagine going to a dealership and asking “How much does a car cost?”. You’re going to get a lot of questions before you get a price, which is the same in the website world. Do you want this used ’98 Camry over here in the corner or a brand new Mercedes with every option available under the sun?

I will be the first to say I understand that most people have never bought a website before and don’t know if their budget should be $2,000 or $20,000 (the answer is, it depends!). But, any web designer who is in this business to help their client’s businesses grow shouldn’t be handing out the same flat-rate number to each prospect that sends them an email.

It’s not responsible and is a telltale sign of a website churner (maybe I’ll submit this definition to urban dictionary):

Website Churner (noun):

A freelancer or organization who competes on price and relies on volume to produce websites with little thought given to the end-result, business goals, or the client’s bottom line.

Budgets Determine Quality

And before we get into real budgets and case studies, I should throw out a disclaimer and say that design is not a commodity. I’m going to use some actual numbers (yes, real-life dollar figures) which may surprise some of you, and will seem shockingly small to others. Either way, I feel like it’s important to remember that one person’s or company’s work is valued in different ways by different people, so website pricing is at best an art form built on top of years of experience, and at worst the outcome of a mad scientist’s experiment.

Really what I’m trying to say is: you get what you pay for. Websites are no different.

Big agencies like Happy Cog won’t touch a website project for less than $100k. Yep, that buys a house in lots of places in this country. You can get someone from odesk.com to install a free WordPress theme for you for $200, probably. And then there’s everywhere in between. And I do mean every price point between $50 and $100k. Welcome to the insane world of the website market.

Spend Money to Make money

Would you invest $10,000 if you were reasonably assured to make $20,000 as a direct result of that investment?

What percentage of people do you think would answer yes to that question? 90%? 99%? 100%?

Yes, those numbers are fictitious and yes, it depends on what “reasonably assured” means, but the line of questioning here is the important part. A website is an investment and just like any investment it’s important to try and come up with a Return on Investment (ROI) number that makes sense – beforea single line of code is written.

Any transaction needs to have an upside for all parties involved, especially for the client. If you meet your goals, you’re happy, and happy clients means more work for us.

The financially astute among you might question the financial upside part of the equation. Namely, what is the likelihood of meeting that revenue goal? What happens if we don’t meet it?

And that is exactly the type of thinking that needs to take place to come up with the right number. I’m not saying a website should cost as much as its ROI, but it would be silly to think that a website that is going to generate $50k for your business next year should cost the same as one that is going to generate $500.

In terms of likelihoods, this isn’t an easy problem to solve. There is of course no guarantee with anything, but the fact remains that trying to launch an amazon.com with the budget of a brochureware site is not going to meet any goals at all.

Budgets Shouldn’t Always Be Big

As someone who sells websites you might think I’m always going to push for the bigger budget option. Well, that’s not exactly true.

If I sell you something that doesn’t make sense for your business, nobody wins. I sell solutions and value, not technology and websites.

For example if your goal is to increase your retreat revenue this year by 50%, it makes more sense to spend money to make money as the quality of the website is going to be completely tied to meeting your goal.

On the other hand you’re just trying to get a simple brochure site up that talks about what you do, then your website isn’t as vital to your business success so you don’t need to invest as much.

Here are some real-life examples of different types of websites and some reasonable budget ranges to think about. These budgets are indicative of professional freelancers and small agencies, as generally speaking my audience doesn’t include larger companies who can afford $25k and up agency websites. Scale up accordingly as your scope, audience, and requirements increase.

Case Study: The Ecommerce Site

Background: Established yoga studio or lifestyle company with potential for online retail sales.

Budget Recommendation: $6k to $12k depending on complexity and options such as online courses or downloadable products.

Case Study: The Ambitious Yoga Teacher

Background: Teaches weekly classes full-time (or almost), the occasional workshop hosted by a yoga studio, and private lessons in their area. Doesn’t need registration but is ambitious and wants to create visibility and a brand that can grow.

Website Solution: Semi-custom WordPress theme with a solid design, including logo, and user-friendly ways to show and update their schedule.

Budget Recommendation: $4k to $8k depending on factors like an online schedule tool and logo design.

Case Study: The Part-Time Yoga Teacher

Background: Teaches weekly classes part-time, with the occasional private lesson. Budget is a concern and yoga is more of a passion than a way of making a living.

Website Solution: Semi-custom WordPress theme (or an off-the-shelf template) that is customized slightly to give it personality. A solid contact form and weekly schedule.

Budget Recommendation: $2k to $5k depending on specifics. Other possibilities for this include DIY options like Squarespace, a purchased WordPress template, or a managed, hosted service like Yoga Launch (shameless plug – coming soon!)

Summary

Everyone is different. Every website is different. Every designer or web design agency is different. But the good ones will work with you to figure out what budget makes sense for you, your business, and your needs. If they don’t, and they offer you a set price before hearing what you need, I’d think twice about working with them.

I’d love to hear your feedback on this approach and if it makes sense to you, especially for folks who don’t live in this world constantly.

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David is an experienced web designer and WordPress developer who runs Healing Arts Web, offering quality custom websites to small businesses and teachers. He is also a musician, avid disc golfer and espresso enthusiast.